Fewer regs could lower drug costs: White House council
- White House Council of Economic Advisers (CEA) suggested in a report that reducing U.S. drug prices and stimulating innovation aren't mutually exclusive.
- The CEA also suggested more oversight of the 340B drug payment program. The report puts forward the idea of a single entity to set prices "at which the eligible providers can buy drugs. Such an agency would require better guidance for how reduced eligibility and profiteering can be implemented going forward."
- The report is sympathetic to the pharma industry view in many ways, including calling for a broad look at patient health, rather than a single focus on list prices of a drug. "It is misleading, however, to consider only the prices of these new drugs without evaluating the well-being of patients before the drug became available," it says.
The CEA report offers ways that the Center for Medicare and Medicaid Services can lower domestic drug prices while the federal government reforms the FDA to "encourage more robust price competition." The white paper says the federal government also needs to look into how its policies inflate drug prices and temper price competition. The report added that incentives for pharmaceutical innovation are possible while promoting lower drug prices.
President Trump blasted drugmakers for "getting away with murder" while campaigning for president and since, but his proposals have largely been seen as pharma-friendly.
"The U.S. biopharmaceutical industry is the engine of worldwide biopharmaceutical innovation and an important part of our economy. Preserving this industry and encouraging it to innovate while making drugs more available and affordable for all Americans is an attainable goal," the CEA wrote.
The changes to the 340B program are expected to save $1.6 billion, but that money will come from cutting payments to hospitals, which rely on the program to help cover other services. Hospitals, especially safety net hospitals, said they use the savings to help provide uncompensated care, which the American Hospital Association said is already on the rise.
However, the CEA charged that hospitals are profiting from the program. "The 340B statute does not dictate how covered entities use the revenue. They are not obligated to pass the discount savings onto patients nor are they required to report how they served low-income or vulnerable population," said the CEA.
Meanwhile, the AHA took aim at a recent NEJM report regarding the 340B program. The AHA said the study overly relied on fee-for-service Medicare data though FFS beneficiaries only account for at most 23% of low-income people. The largest group of low-income people are children and then the working poor, AHA said.
The AHA, as well as the Association of American Medical Colleges, America’s Essential Hospitals, Eastern Maine Healthcare Systems, Henry Ford Health System and Fletcher Hospital, Inc., filed a lawsuit in November to block the 340B payment cut. After a judge dismissed the lawsuit in December because the policy had not yet gone into effect, the organizations appealed the judge’s decision.
There’s also disagreement on Capitol Hill about the 340B program and cuts. More than 200 members of the House of Representatives sent a letter asking CMS to abandon the cuts. Meanwhile, Republicans in Congress have raised concerns about the program's growth rate and lack of transparency, accountability and reporting.